HOW TO HANDLE YOUR MONEY
PERSONAL MONEY MANAGEMENT
IMPORTANT TERMS TO UNDERSTAND
1. Income—money you earn
2. Savings—income a person has not spent after
buying things he /she wants or needs3. Investing—putting money aside in order to
receive a greater benefit in the future4. Interest—a fee for the use of the money
invested; aka, profit
THINK ABOUT YOUR MONEY
• What is the advantage of a savings account over a checking account?• It’s a form of
investing your money• You earn a higher
interest rate on your money
KEEP ON THINKING
• When is the BEST time to borrow money (obtain a loan)?• Look for low
interest rates!!! Shop around with different lenders• Work hard to keep
your credit score high
MORE THINKING
• When should people buy less on credit?• When you already
have debt accumulating• When interest
rates are high
BE CAREFUL!!!
• Why are credit cards dangerous?• You must pay
them off• Interest rates add
more to the money you owe• High debt to
income ratios can damage your credit rating
TRY TO INVEST YOUR MONEY
• There are a variety of ways to make money on your money• Open a savings account• Buy certificates of deposit
(CDs)—these carry a higher interest rate than a savings account
• Buy bonds—the longer you wait for your bond to mature the money you will make
• Buy stocks & mutual funds—but be willing to wait; few people can “get rich quick” in the stock market
REMEMBER—YOU HAVE CHOICESHow you spend your money is your choice• Make sure to be able to live on the
money you earn to avoid debt• Develop a budget & review it
frequently• Save money—its recommended you
have a minimum of 3 months salary saved just in case you lose your job
• Be careful with this concept: opportunity cost• This is when you have money left
over after meeting all your expenses and you CHOOSE to spend it
• Pay attention to how you choose to use this money
• You can save it!• You can spend it on something
important like car repairs• You can “treat” yourself to
something, maybe a nice dinner out, a new outfit, etc
• BUT—think about the long term cost of your choice